View full sizeMike Gupta, Twitter's chief financial officer, photographs a board at the post before shares begin trading during the IPO, on the floor of the New York Stock Exchange, Thursday, Nov. 7, 2013. If Twitter's bankers and executives were hoping for a surge on the day of the stock's public debut, they got it. The stock opened at $45.10 a share on its first day of trading, 73 percent above its initial offering price.AP Photo/Richard Drew

ALLENDALE, MI — A local economics professor can't help but laugh as investors and Twitter users alike are aflutter over the popular social networking site's stock market debut.

Gregg Dimkoff, a professor at Grand Valley State University, predicts the site's sky-high valuation at more than $32 billion Thursday, Nov. 7, will come crashing back to Earth given some early indicators the company could have trouble growing.

Twitter began trading as TWTR on the New York Stock Exchange after years of speculation, priced at $45.10 a share — soaring above its initial public offering, or IPO, at $26 a share Wednesday night.

CNBC reports Twitter's market worth is about the size to cereal giant General Mills.

The company hasn't made a profit in seven years and currently is trading at 26 times its revenue, Dimkoff said. It also lost more than $300 million in the past three years, according to The New York Times.

"All of this is ridiculous, there aren't any reasons to buy it," he said. "The price is based on hope and expectations."

IPOs are set up against the individual investor in making a profit, the professor explained. "Smart money," including large banks, mutual funds and wealthy investors, buy up a majority of the company's shares before individuals even have a chance at the scraps, Dimkoff said.

It's best to wait about six months before jumping into any IPO and after the craze ends to truly see how a company performs and handles itself in the marketplace, Dimkoff said. And in Twitter's case, there are too many uncertainties as to how it can increase its revenue with limited advertising dollars.

Dimkoff said he was surprised the company's stock didn't debut on the NASDAQ given its profile of high-tech companies, but last summer's botched debut of Facebook likely had executives flying the coop to a safer perch.

Andrew Krietz covers breaking and general police/fire news for MLive | The Grand Rapids Press. Email him at akrietz@mlive.com or follow him on Twitter.